SEVI 3013 EXAM GUIDE QUESTIONS
WITH CORRECT ANSWERS
Second Movers - Answer-- a firm that responds to the first mover's competitive action,
typically through imitation
- they study customers' reactions to product innovations, try to find mistakes the first
mover made so they can avoid them and the problems they created, and they have the
time to develop processes and technologies that are more efficient than those the first
mover used and create additional value for consumers
- the most successful second movers can interpret market feedback with precision in
order to respond quickly yet successfully to first movers' successful innovations
Late Mover - Answer-- a firm that responds to a competitive action a significant amount
of time after the first mover's action and the second mover's response
- they achieve considerably less success than do first and second movers and they
require considerable time to understand how to create at least as much customer value
as that offered by the first and second movers' products
- typically only earn average returns
Learning Curve - Answer-the depiction that shows that at the beginning, cost per unit is
high but eventually goes down and flattens as time goes on and improvements are
made
Bundling Model - Answer-bundle multiple products then sell at a reduced price
-ex: Microsoft Office or fast food places when offer meals at cheaper price
Dynamic Nature of Business Models - Answer--many companies have multiple business
models
-models can evolve (freemium to subscription)
-models can be disrupted
-Beer Distributorships: breweries don't allow other brands "in house" and craft beers
and non-alcoholic products demanded locally
-Failed Business Models: blockbuster and kodak
Assess and Evaluate Business Models - Answer--Imitation Protection: secrecy,
trademark, and lead time
-Protected from stakeholder holdups
-Slack: ability to weather failure of some elements of the business plan
Strategic Action/Response - Answer-market-based move that involves a significant
commitment of organizational resources and is difficult to implement or reverse
Tactical Action/Response - Answer--market-based move that is taken to fine-tune a
strategy
, -usually involves fewer resources and is relatively easy to implement and reverse
Competition - Answer-the struggle among producers for the dollars of consumers
Firms Compete for - Answer-- customers
- geographic resources
- inputs
- talent
- capital
- technology
Competitor Analysis - Answer-- the first step a firm takes to be able to predict its
competitors' actions and responses
- it's a technique firms use to understand their competitive environment by studying
competitors' future objectives, current strategies, assumptions, and capabilities
Market Commonality - Answer-concerned with the number of markets with which the
firm and a competitor are jointly involved and the degree of importance pf the individual
markets to each
Resource Similarity - Answer-- the extent to which the firm's tangible and intangible
resources compare favorably to a competitor's in terms of type and amounts
- firms with similar types and amounts of resources tend to have similar strengths and
weaknesses and use similar strategies in light of their strengths to pursue what may be
similar opportunities in the external environment
Drivers of Competitive Behavior - Answer-1. Awareness
2. Motivation
3. Ability
Awareness - Answer-- refers to the extent to which competitors recognize the degree of
their mutual interdependence
- it tends to be greatest when firms have highly similar resources (in terms of types and
amounts) to use when competing against each other in multiple markets
Motivation - Answer-- concerns the firm's incentive to take action or to respond to a
competitor's attack
- a firm may not be motivated to engage in competitive rivalry if it perceives that its
market position will neither improve nor suffer if it does not respond
Ability - Answer-- refers to the quality of the resources available to the firm to attack and
respond
- without available resources (such as financial capital and people), the firm is not able
to attack a competitor or respond to its action
WITH CORRECT ANSWERS
Second Movers - Answer-- a firm that responds to the first mover's competitive action,
typically through imitation
- they study customers' reactions to product innovations, try to find mistakes the first
mover made so they can avoid them and the problems they created, and they have the
time to develop processes and technologies that are more efficient than those the first
mover used and create additional value for consumers
- the most successful second movers can interpret market feedback with precision in
order to respond quickly yet successfully to first movers' successful innovations
Late Mover - Answer-- a firm that responds to a competitive action a significant amount
of time after the first mover's action and the second mover's response
- they achieve considerably less success than do first and second movers and they
require considerable time to understand how to create at least as much customer value
as that offered by the first and second movers' products
- typically only earn average returns
Learning Curve - Answer-the depiction that shows that at the beginning, cost per unit is
high but eventually goes down and flattens as time goes on and improvements are
made
Bundling Model - Answer-bundle multiple products then sell at a reduced price
-ex: Microsoft Office or fast food places when offer meals at cheaper price
Dynamic Nature of Business Models - Answer--many companies have multiple business
models
-models can evolve (freemium to subscription)
-models can be disrupted
-Beer Distributorships: breweries don't allow other brands "in house" and craft beers
and non-alcoholic products demanded locally
-Failed Business Models: blockbuster and kodak
Assess and Evaluate Business Models - Answer--Imitation Protection: secrecy,
trademark, and lead time
-Protected from stakeholder holdups
-Slack: ability to weather failure of some elements of the business plan
Strategic Action/Response - Answer-market-based move that involves a significant
commitment of organizational resources and is difficult to implement or reverse
Tactical Action/Response - Answer--market-based move that is taken to fine-tune a
strategy
, -usually involves fewer resources and is relatively easy to implement and reverse
Competition - Answer-the struggle among producers for the dollars of consumers
Firms Compete for - Answer-- customers
- geographic resources
- inputs
- talent
- capital
- technology
Competitor Analysis - Answer-- the first step a firm takes to be able to predict its
competitors' actions and responses
- it's a technique firms use to understand their competitive environment by studying
competitors' future objectives, current strategies, assumptions, and capabilities
Market Commonality - Answer-concerned with the number of markets with which the
firm and a competitor are jointly involved and the degree of importance pf the individual
markets to each
Resource Similarity - Answer-- the extent to which the firm's tangible and intangible
resources compare favorably to a competitor's in terms of type and amounts
- firms with similar types and amounts of resources tend to have similar strengths and
weaknesses and use similar strategies in light of their strengths to pursue what may be
similar opportunities in the external environment
Drivers of Competitive Behavior - Answer-1. Awareness
2. Motivation
3. Ability
Awareness - Answer-- refers to the extent to which competitors recognize the degree of
their mutual interdependence
- it tends to be greatest when firms have highly similar resources (in terms of types and
amounts) to use when competing against each other in multiple markets
Motivation - Answer-- concerns the firm's incentive to take action or to respond to a
competitor's attack
- a firm may not be motivated to engage in competitive rivalry if it perceives that its
market position will neither improve nor suffer if it does not respond
Ability - Answer-- refers to the quality of the resources available to the firm to attack and
respond
- without available resources (such as financial capital and people), the firm is not able
to attack a competitor or respond to its action
